Jim calls it like it is when interviewed by Max Keiser on Russia Today yesterday. The video was posted on the youtube.com Internet site...and is well worth watching. The interview begins at the 12:00 minute mark. I thank reader Harold Jacobsen for today's first story.
The stock of capital flowing into emerging markets has doubled from $4 trillion to $8 trillion since the Lehman Crisis, chasing a catch-up growth story that looks tired and has largely sputtered out in Brazil, Russia and South Africa.
Much of the money has gone into debt, with falling economic returns. This is the next shoe to drop in the festering saga of global imbalances. All it will take is a gear-shift by the US Federal Reserve and the inevitable dollar surge that follows. It was the Volcker Fed that set off Latin America's defaults in the early 1980s. It was the mighty dollar that set off Mexico's Tequila crisis, and then the East Asian chain-reaction in the 1990s.
"Every emerging market blow-up that I have seen was preceded by a rise in the dollar," said Albert Edwards for Société Générale .
"Investors overlook how vulnerable these countries are to a dollar shock. The whole process of excess liquidity and foreign reserve build-up goes into reverse. It acts like monetary tightening and turns into a vicious circle. Markets look for the weak link with the worst current account deficit, and then the dominoes start to fall," he said.
This must read Ambrose Evans-Pritchard article was posted on the telegraph.co.uk Internet site late on Wednesday evening BST...and I thank Roy Stephens for bringing it to our attention.
Austerity is out after the euro-area recession extended to a sixth quarter. Stimulus isn’t yet in.That was the something-for-everyone message from European leaders at a summit in Brussels yesterday. All touted a previously announced 6 billion-euro ($7.7 billion), seven-year initiative to fight youth unemployment, now at 24 percent. National governments won’t put up more cash, German Chancellor Angela Merkel said.
“It’s not a matter of money,” Merkel told reporters after the summit. “It’s a matter of looking at how to spend this money most productively.”
The 17-nation euro area’s nonstop contraction since the third quarter of 2011 has left the European Central Bank to try to mitigate the damage by cutting interest rates and exploring unconventional ways of channeling money to needy companies, especially in the south.
This Bloomberg story, filed from Brussels, was posted on their website just before midnight MDT on Wednesday...and it's courtesy of U.A.E. reader Laurent-Patrick Gally.
Large depositors in the EU will from 2016 be in line to suffer losses if a bank gets into serious trouble, but deposits under €100,000 should be fully protected, MEPs in the economic affairs committee voted late on Monday (20 May).
“The bail-in of any creditors should be done according to a clear hierarchy, with depositors with savings over €100,000 last in line, whilst deposits under €100,000 would be fully protected,” said Green economic and finance spokesperson Philippe Lamberts in a statement.
The votes amended the European Commission’s bank recovery and resolution proposal.
The devil is, as they say, in the details...and there is quite a bit in the fine print...which you'll soon discover if you read this euobserver.com story from yesterday...and I thank Roy Stephens for his second story in today's column.
The European Commission has been forced to beat a hasty retreat from a proposed ban on jugs of olive oil in restaurants after the idea met with widespread ridicule.
Barely a week after it was announced for "hygiene" and "consumer protection" purposes, the EU commissioner in charge, Dacian Ciolos, rushed to the same press room on Thursday (23 May) to announce he was withdrawing the measure.
Referring to the "quite strong reactions", Ciolos said he had decided to "not submit it for adoption."
The proposal would have banned jugs and dipping bowls of olive oil in restaurants from next year and was meant to prevent restaurant-goers from being served any old inferior oil.
This is from the top drawer of the "You can't make this stuff up" filing cabinet...and was posted on the euobserver.com Internet site late yesterday afternoon Europe time...and it's Roy Stephens' third offering of the day.
Yields on 10-year Japanese bonds (JGBs) have doubled in a month and spiked dramatically to 1pc on Thursday, triggering a 7.3pc crash in the Nikkei stock index. It was the biggest one-day fall since the tsunami two years ago, comparable with wild moves seen at the height of the Asian crisis in 1998.
The contagion effect set off a retreat from stocks across the world, though Wall Street later pared losses. The iTraxx Crossover or “fear gauge” for corporate bonds jumped 25 points to 392.
The Bank of Japan (BoJ) intervened with $20bn (£13bn) to drive down yields again but the failure to ensure an orderly debt market has started to rattle investors. Banks, pension funds and insurers appear to be dumping JGBs for fear of being caught on the wrong side of a bond rout.
Richard Koo from Nomura, an expert on Japan’s Lost Decade, said the sell-off in recent days has shown that the BoJ may not be able to hold down yields “no matter how many bonds it buys”. This could lead to a “loss of faith in the Japanese government” and the “beginning of the end” for its economy, if handled badly.
This must read commentary by Ambrose Evans-Pritchard was posted on The Telegraph's website yesterday evening BST...and I thank reader Glenn Jeffs for bringing this very important story to our attention.
1. James Turk: "We Are Witnessing Extraordinary Events in Gold and Silver". 2. Rick Rule: "How Investors Can Make a Fortune in These Markets". 3. Jim Grant: "Gold and the Fed's Ungraceful Attempt to Exit QE". 4. The audio interview is with Michael Pento.
In his market letter for May, commodities fund manager John Butler of Amphora Capital in London describes the rationales and mechanisms of surreptitious currency market intervention by central banks, rationales and mechanisms that will be familiar to anyone who follows the gold market with even the slightest skepticism.
Drawing on a long conversation he had years ago with his professor of international economics in graduate school, a professor who was a former high U.S. Treasury Department official, Butler writes that supporting the U.S. dollar amid suppression of interest rates well may involve surreptitious suppression of the price of gold:
"The United States may have little in the way of foreign exchange reserves but it has a huge pile of gold reserves -- the world's largest, in fact. If the U.S. were to set about covertly intervening to support the dollar amid artificially low interest rates, therefore, it would make far more sense to do so through covert intervention in the gold market. Should they follow my former professor's advice, they would sell gold into the market at relatively illiquid times for maximum price effect. They would do so repeatedly until certain technical chart patterns turned in favor of the dollar and against gold, establishing a new trend. And if they succeeded, no one need ever know."
Central bankers, Butler notes, are very skilled tape painters.
With Butler's kind permission, the May edition of his letter, the Amphora Report, is posted at GATA's Internet site. It's a must read for sure...and I thank Chris Powell for wordsmithing the above introduction.
Gold capped the biggest gain in almost a month on signs that Chinese manufacturing will slow in May for the first time in seven months, sparking a drop in global equities and increased demand for bullion as a protection of wealth.
The preliminary reading for a Chinese purchasing managers’ index missed analysts’ estimates and came in below the level of 50, indicating a contraction. Commodities and stocks retreated, with Japanese equities falling the most since the aftermath of the Fukushima disaster two years ago. Bullion also gained as the dollar declined the most in more than a month against a basket of currencies.
“Nervous investors are turning to gold as everything else looks very bleak today,” Carlos Perez-Santalla, a broker at Marex North America LLC, said in a telephone interview from New York. “The weakness in the dollar is supportive for gold.”
This Bloomberg story was posted on their website during the Denver lunch hour yesterday...and I thank West Virginia reader Elliot Simon for finding it for us.
The yuan rose 0.6 percent this month, the best performance in Asia, as Premier Li Keqiang signaled China will unveil a plan on capital-account convertibility this year. People’s Bank of China Deputy Governor Yi Gang said in April the yuan’s trading band will be widened “in the near future.” The central bank sets a daily reference rate for the currency, which can diverge from the fixing by a maximum 1 percent.
China may double the band within a year, Ma Jun, chief economist for Greater China at Deutsche Bank AG, said at a press conference in Singapore on May 22. The nation has designated Qianhai district of Shenzhen, a city that borders Hong Kong, as a testing ground for freer cross-border yuan usage. The yuan climbed as much as 0.1 percent today to a 19-year high of 6.1279 per dollar in Shanghai after the central bank strengthened its fixing by 0.13 percent to a record 6.1867.
A wider trading range for the currency will spur trading and hedging in gold denominated in it, China Gold & Silver’s Cheung said. The society may seek cooperation with Qianhai Authority in steps to develop yuan-based bullion trading, such as building a vault for the precious metal, he said.
This Bloomberg news item, filed from Hong Kong, was posted on their Internet site yesterday evening MDT...and I thank Marshall Angeles for sending it along.
Goldbroker's Fabrice Drouin Ristori interviewed GATA's secretary/treasurer about gold market manipulation the other day, leading off with the question of how long it can continue. This interview was posted on the goldbroker.com Internet site yesterday.
Bron Suchecki of the Perth Mint reviews U.S. commodity trading regulations and concludes that they're too complicated and full of loopholes to result in any sensible interpretation that might be applied against market manipulation by the Commodity Futures Trading Commission.
"What the market needs," Suchecki writes, "is straightforward, common-sense rules that everyone knows in advance. ... Or just drop the pretense and go free-for-all law of the jungle. Having interest rates this low doesn't help, as speculators have minimal cost in holding a position for a long time (until it blows up) or taking on large positions. This just adds to the volatility. Time to give up on the CFTC being able to control this."
Suchecki's commentary is headlined "Time to Give Up on the CFTC" and it's posted at the 24hGold.com Internet site. I found this commentary in a GATA release from yesterday evening Vancouver time.
Federal Reserve Chairman Ben S. Bernanke defended the central bank’s record stimulus program under questioning from lawmakers, telling them that ending it prematurely would endanger a recovery hampered by high unemployment and government spending cuts.
“A premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further,” Bernanke said today in testimony to the Joint Economic Committee of Congress in Washington.
Bernanke lamented the human and economic costs of an unemployment rate at 7.5 percent nearly four years into the recovery from the deepest recession since the Great Depression, and said the Fed’s easing is providing “significant benefits.” His comments echoed remarks by William C. Dudley, president of the Federal Reserve Bank of New York, who said in an interview that it would take three to four months before policy makers will know whether a sustainable recovery is in place.
You have to ask yourself this question. What recovery is he talking about? I thank U.A.E. reader Laurent-Patrick Gally for sending me this Bloomberg story yesterday.
Federal Reserve Bank of New York President William C. Dudley said policy makers will know in three to four months whether the economy is healthy enough to overcome federal budget cuts and allow the central bank to begin reducing record stimulus.
“I don’t really understand very well how the tug-of-war between the fiscal drag and the improving economy are going to sort of work their way out,” Dudley said in an interview with Michael McKee airing on Bloomberg Television. “Three or four months from now I think you’re going to have a much better sense of, is the economy healthy enough to overcome the fiscal drag or not.”
Dudley’s remarks underscore that Fed officials have yet to reach consensus on when or how to dial back their $85 billion monthly bond-purchase program designed to spur growth and lower unemployment. Philadelphia Fed President Charles Plosser has called for reducing stimulus at the Fed’s next meeting in June, while St. Louis’s James Bullard said Tuesday the purchases should continue.
Why does anyone pays attention to these guys? It's print...or die...and a couple of more months ain't going to make any difference, as they're still going to print. This moneynews.com article from yesterday was sent to me by West Virginia reader Elliot Simon.
This 7:28 minute video with Jim Grant and Maria Bartiromo was posted on the CNBC website yesterday afternoon just after the markets closed. It's a must watch for sure...as James rips the Fed a new one...and I thank I thank reader Joseph Kahan for sharing it with us.
Applications for U.S. home mortgages dropped for a second week in a row last week as a spike in interest rates stymied demand for refinancing, data from an industry group showed on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, tumbled 9.8 percent in the week ended May 17.
The index of refinancing applications slumped 11.7 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, fell 3 percent.
This very short Thomson/Reuters story appeared on the moneynews.com Internet site very early yesterday morning EDT...and is worth skimming. I thank Elliot Simon for his second offering in today's column.
A top IRS official in the division that reviews nonprofit groups will invoke the 5th Amendment and refuse to answer questions before a House committee investigating the agency’s improper screening of conservative nonprofit groups.
Lois Lerner, the head of the exempt organizations division of the IRS, won’t answer questions about what she knew about the improper screening — or why she didn’t disclose it to Congress, according to a letter from her defense lawyer, William W. Taylor III. Lerner was scheduled to appear before the House Oversight Committee on Wednesday.
“She has not committed any crime or made any misrepresentation but under the circumstances she has no choice but to take this course,” said a letter by Taylor to committee Chairman Darrell Issa (R-Vista). The letter, sent Monday, was obtained Tuesday by the Los Angeles Times.
This story appeared on the L.A. Times website early on Tuesday afternoon PDT...and I found it in yesterday's edition of the King Report.
The latest poll of Morgan Stanley's top clients from across the world says it all.
Chief economist Joachim Fels tells us that not a single investor at the bank's Florence forum thought the world economy would rebound with any strength later this year.
Just a quarter expect a return to trend growth. Some 57pc think there will be no escape from the "twilight" conditions afflicting the western world, and 20pc expect an full-blown global recession. That is a remarkably bearish set of views. Yet the same investors are overwhelmingly bullish on stocks and property.
This schizophrenic exuberance seems entirely based on the assumption that QE and central bank largesse will keep the game going, flooding asset markets with liquidity. Indeed, 80pc think the ECB will cut rates again, and half think it will have to swallow its pride and join the QE club in the end.
Great shades of 1929! Party on, dude! This must read commentary by Ambrose Evans-Pritchard was posted on the telegraph.co.uk Internet site on Tuesday...and I thank Roy Stephens for bringing it to our attention.
Europe edged closer to lifting banking secrecy on Wednesday after Austria said it was ready to share data on foreign depositors but Vienna's support could fade should efforts to strike a similar deal with Switzerland fail.
Austria's dropping of objections allowed EU leaders to commit to an exchange of bank information between countries by the end of the year, as cash-strapped states seek to stop tax evasion and close loopholes highlighted by Apple Inc's use of a base in Ireland.
"It's a bad day for tax cheats," Austrian Chancellor Werner Faymann told reporters at a meeting of EU leaders to discuss fighting tax fraud by lifting bank secrecy.
"I believe we will manage the exchange of data by the end of the year," he said, adding later that although he was watching negotiations on a similar deal with Switzerland, Austria was in "full agreement".
This Reuters article was filed from Brussels...and posted on their website mid-afternoon on Wednesday...and it's another offering from Laurent-Patrick Gally.
Asian stocks took a beating Thursday as data showing that Chinese manufacturing activity unexpectedly contracted in May exacerbated early losses recorded on worries the Federal Reserve could downscale its bond purchases.
Japanese shares suffered the most, with the Nikkei Stock Average swinging spectacularly to plunge more than 4% in the afternoon session from a 2% rise posted earlier in the day.
The benchmark, which had ended at multiyear highs in each of the previous four sessions, was down 4.1% in highly volatile late-afternoon trade.
The Nikkei Average’s more-than-6-point intraday reversal coincided with a surge in Japanese government bond yields that forced the Bank of Japan to offer 2 trillion yen ($19 billion) in funds to calm investor nerves. The central bank announced the fund-supplying operation after 10-year JGB yields soared to their highest level in more than a year, citing “the unreasonable increase” in volatility.
This marketwatch.com story, filed from Hong Kong, was posted on their website in the wee hours of this morning EDT. It's worth your time...and I thank reader 'David in California' for finding it for us.
The first interview is with Michael Pento...and it's headlined "Fed Lies and Propaganda Won't Stop Gold and Silver Rise". Next is this commentary by Citi analyst Tom Fitzpatrick "Gold to Advance a Stunning $2,000+ From Current Levels". Here's a blog with Robert Fitzwilson. It's entitled "The Fed Destruction and a Cascading Panic Among Investors". And lastly is this interview with Dan Norcini...and it bears the headline "Incredibly Important Developments in Many Key Markets".
Four silver sets from the United States Mint are slated to be reduced in price according to a memo from the bureau.
According to the U.S. Mint, the 2012 and 2013 US Mint America the Beautiful Quarters Silver Proof Set, the 2013 US Mint Silver Proof Set, and the 2013 US Mint Congratulations Set will all be re-priced. Effective date for the change is not yet known, though it could happen on Wednesday.
This short article was posted on the silvercoinstoday.com Internet site on Tuesday...and I thank Marshall Angeles for sending it.
London-listed gold producer Petropavlovsk has said it will pre-sell 55pc of its future output planned for the second quarter of 2014, at an average price of $1,408 an ounce. This is the first time that a big producer has hedged more than half its future sales.
“We have a huge investment programme and thought a little price protection in the short-term will let us sleep better at night,” said chairman Peter Hambro.
“It was hedging that killed gold prices the 1990s,” said Ross Norman from Sharps Pixley. “Every time there was rally, the producers seized on the chance to sell forward. It was most unhelpful.”
Mr. Norman said it was the unwinding of hedge books a decade ago that unleashed the bull market. This process could now go into reverse if hedging spreads. "We don't think it will. The forces that led to the bull market will prevail," he said.
The forward sale is for only three months...and Ross Norman has it exactly right. Except for project financing, no miner is going to put their head back in that particular lion's mouth ever again. This Ambrose-Evans Pritchard offering was posted on The Telegraph's website early yesterday evening BST...and it's Roy Stephens second and final offering in today's column.
During the third week of May each year, representatives of the platinum industry gather in London, for an event that has become known as ‘Platinum Week’. Platinum Week centers on an industry dinner sponsored by the London Platinum and Palladium Market (LPPM) which marks the anniversary of the inauguration of the London Platinum Quotation (the forerunner of the present London Fixings) in 1973.
This event is attended by platinum group metals (PGM) producers, refiners, fabricators and traders. The first major event of the week is the publication of Johnson Matthey’s annual review of supply and demand for the PGM markets.
According to Johnson Matthey, the platinum market was in deficit by 375,000 ounces in 2012, close to their forecast made last November. The palladium market was also undersupplied but by a much larger margin of more than 1 million ounces.
This commentary by David Franklin over at Sprott Asset Management is a must read.
Sprott Silver Equities Class Co-Manager Maria Smirnova understands the power of leverage. She has seen the big impact even a slight increase in the silver price can have on silver producers. Every cent is multiplied and goes right to the investor's bottom line, giving the equities more upside than possible in a coin. That is why Eric Sprott increased holdings of silver equities in certain Sprott funds. Smirnova discusses five of these companies in this interview with The Gold Report.
This interview was posted on theaureport.com Internet site yesterday...and is well worth reading.
Premiums for gold bars hit a record high in Asia on Wednesday as lower spot prices lured more buyers, mainly in China, the world's second biggest consumer of the precious metal, amid tight physical supplies.
Premiums for gold bars in Hong Kong touched a new all-time high of $6 an ounce over spot London prices, up from $5 last week. Singapore premiums rose to $5.
Banks in China were quoting up to $7 in premiums, two traders in Singapore said.
This Reuters story, filed from Singapore, was posted on the mineweb.com Internet site...and I thank Manitoba reader Ulrike Marx for sharing it with us. It's definitely worth reading.
Although the primary purpose of the futures markets is to provide an efficient and effective mechanism for the management of price risks, when it comes to precious metals, and as we have seen in recent weeks, it has become nothing more than a casino run by a group of bullion banks that are acting as agents for the US Federal Reserve which is intent in manipulating these markets as they do all other markets. And, while much of the recent volatility has been caused by the options and futures market, the regulatory authorities of the CFTC who came up with a series of hikes in margins to stop the price of both gold and silver from rising, claiming that the markets were extremely volatile, I see they have done nothing to prevent the recent price drops.
The action or lack thereof by the regulatory authorities is most disturbing and would suggest that they themselves are colluding with the parties involved in this illegal manipulation of the gold and silver market.
Another excellent commentary on the obvious price management scheme by JPMorgan Chase et al. Author David Levenstein. a South African gold trader and bullion dealer, lets it all hang out in this rather long, but on-the-money commentary filed from Johannesburg on Tuesday. I thank reader Rudi Staudinger for our last story of the day...and it's certainly worth your time.
U.S. policymakers must address debt loads projected to rise later this decade to avoid a 2013 downgrade, even as the latest budget projections are “credit positive,” according to Moody’s Investors Service.
The U.S. budget deficit will drop to $378 billion in 2015 from a record $1.4 trillion in 2009, according to Congressional Budget Office data. The federal government will post a $642 billion deficit this year, the first time in five years that the shortfall has been less than $1 trillion. Moody’s said Sept. 11 that the U.S.’s top Aaa rating would likely be cut to Aa1 if an agreement on the debt ratio isn’t reached.
“The fact that it showed much lower debt levels going forward, we view as a positive development,” Steven Hess, senior vice-president at Moody’s and based in New York, said in a telephone interview of the CBO forecast. “More needs to be done on the policy front to address this rising debt ratio.”
This moneynews.com article was posted on their website early Monday afternoon..and today's first story is courtesy of West Virginia reader Elliot Simon.
After five years under investigation for insider trading, Steven Cohen is considering proposing a deal to prosecutors that would shut his $15 billion hedge-fund firm to outside investors, according to a person familiar with his thinking.
Cohen has discussed an agreement under which his SAC Capital Advisors LP would admit wrongdoing but wouldn’t be prosecuted unless it broke the law again, said the person, who asked not to be named because the talks are private. As part of the deal, known as a deferred prosecution agreement, Cohen would close the Stamford, Connecticut-based firm to outside investors and make it a family office that manages his personal fortune. SAC Capital probably would also pay a fine.
That Cohen would ponder a deferred prosecution agreement suggests the 56-year-old billionaire sees it as unlikely that he could fight criminal insider-trading charges and continue to run a hedge fund. Prosecutors, who have already linked at least nine current or former employees to insider trading while at SAC Capital, probably wouldn’t accept an agreement that lets Cohen off the hook, said John Coffee a professor at Columbia University School of Law.
"...won't be prosecuted unless it breaks the law again???" That's saying that you can commit your first murder, bank robbery, or fraud...and get a pass. You can't make this stuff up. This story was posted on the Bloomberg website late Monday afternoon...and it's courtesy of U.A.E. reader Laurent-Patrick Gally.
Whether it’s the shape-shifting group of reptilian descendants from the constellation Draco who control humanity, or the shadowy cabal of powerful financiers and politicians who covertly run all governments, conspiracy theorists are once again preparing for their annual jamboree of protest against those who really rule the world, this year in the highly secretive destination of... Watford.
For three days beginning on 6 June, a five-star hotel in Chandler’s Cross that normally hosts the England football team before Wembley matches, will turn over its 227 luxury rooms and 300-acre estate grounds to the über-secretive Bilderberg Group.
The Grove, once the home of the earls of Clarendon where prime ministers such as Palmerston and Walpole were guests and where a young Queen Victoria started the fashion for “the weekend break”, will turn back the clock when it welcomes around 140 of Europe and America’s most powerful leaders from banking, finance and politics with a scattering of royalty and aristocracy adding to the elite guest list.
Due to a tradition that stretches back to 1954 and the first conference held at the Hotel de Bilderberg in Oosterbeek in the Netherlands, nothing that is discussed or agreed at a Bilderberg meeting is reported. Until recently even the names of those who were invited was kept secret.
This news item appeared on the independent.co.uk Internet site on Tuesday...and I thank U.K. reader Tariq Khan for bringing it to our attention.
EU leaders will make another bid to agree rules on tax evasion after UK Prime Minister David Cameron called on 10 British tax havens to "get their house in order" on secret bank accounts.
In a letter released Monday (20 May) to the leaders of the British islands, including the Channel and Cayman islands, Cameron urged them to disclose details of accounts used for company ownership.
The islands should "provide for fully resourced and properly managed centralised registries, that are freely available to law enforcement and tax collectors, and contain full and accurate details on the true ownership and control of every company," he said.
This story appeared on the euobserver.com Internet site early yesterday morning Europe time...and it's Roy Stephens first offering in today's column.
Despite the British government’s desire to soft-pedal the country’s possible EU exit, the referendum to decide UK’s future in the Union must be held before the 2015 general election, believes the leader of the UK Independence Party, Nigel Farage.
With a lot of hard feeling swirling around the EU, one thing many seem agreed on is anger at Brussels. Nine European countries are now in recession and, with no end to austerity in sight, EU membership appears to be more trouble than its worth for some.
The leader of the Euroskeptical UKIP party, Nigel Farage, says recent research show that by participating in the EU, Britain is annually losing more than £100 billion due to membership fees and the Union’s regulations.
This story was posted on the Russia Today website late Monday evening Moscow time...and it's another contribution from Roy Stephens.
With Tim Cook being fried on Capitol Hill, it is perhaps ironic that the issue of taxes is front-and-center in the European parliament today. However, as usual, the always-willing-to-tell-the-truth Nigel Farage points out the gross hypocrisy of a political elite calling for higher taxes (on the wealthy and more broadly in peripheral nations) when the reality is that the higher-ups in the European parliament have their marginal tax rates capped at 12%. Of course, none of that matters because stocks are rising and interest rates are falling; but perhaps the 60% of Greek youth or 57% of Spanish youth might be intrigued at the new normal idea of 'fair share' in Europe.
This 3:56 minute tirade was posted on the Zero Hedge Internet site early yesterday afternoon...and this video clip is courtesy of Marshall Angeles.
A draft European Union law voted on Monday would shield small depositors from losing their savings in bank rescues, but customers with over 100,000 euros in savings when a bank failed could suffer losses.
On Monday, a group of European lawmakers in the house's economics committee voted that, from 2016, large depositors in the European Union might suffer losses if a bank gets into serious trouble, echoing a deal in Cyprus where wealthy depositors were hit hard at two banks to save the country from bankruptcy.
Under the EU proposal, a bank would only dip into large deposits of over 100,000 euros once it had exhausted other avenues such as shareholders and bondholders.
This Reuters story, filed from Brussels, was posted on their website late on Monday evening Europe time...and I thank Manitoba reader Ulrike Marx for sending it along.
Wealthy businesspeople shift millions of euros abroad while profitable companies use accounting tricks to minimize their taxable earnings and assets. The EU finally wants to create effective policies to curb these practices, but faces strong opposition from member states.
BASF, based in Ludwigshafen in southwestern Germany, has a large tax department, whose work consists partly in moving money around between continents. But now the company has discovered a tax haven right at home in Europe
In addition to a large plant, the company operates the BASF Belgium Coordination Center in Antwerp. Some 160 employees at the center spend a portion of their time searching for legal ways to reduce BASF's tax bill. In 2011, the company paid taxes on its many millions in profits at a rate of only 2.6 percent.
BASF is by far not the only company to take advantage of favorable tax conditions in a neighboring EU country to improve its bottom line. Volkswagen, currently the most profitable company in Germany, was even greedier. In 2012, Belgian subsidiary Volkswagen Group Services paid no taxes at all on profits of €153 million, and in the previous year it raked in €141 million in tax-free profits -- and it was all completely legal.
This story was posted on the German website spiegel.de yesterday afternoon Europe time...and I thank Roy Stephens for sharing it with us.
More than 8,000 French households' tax bills topped 100 percent of their income last year, the business newspaper Les Echoes reported on Saturday, citing Finance Ministry data.
The newspaper said that the exceptionally high level of taxation was due to a one-off levy last year on 2011 incomes for households with assets of more than 1.3 million euros ($1.67 million).
President Francois Hollande's Socialist government imposed the tax surcharge last year, shortly after taking office, to offset the impact of a rebate scheme created by its conservative predecessor to cap an individual's overall taxation at 50 percent of income.
This Reuters item, filed from Paris, was posted on their Internet site early Saturday afternoon EDT...and I thank U.K. reader Teresa Tannahill for bringing it to our attention.
The US Senate Foreign Relations Committee voted on Tuesday to pass a bill that will be highly unpopular in Moscow, not to mention Damascus.
The Syrian Transition Support Act would provide arms to Syrian rebels in support of a regime change — a precedent Russia deeply opposes. Moscow has already been overtly sending weapons to Assad (more intensely so as of late), so Washington's move to overtly arm the rebels could easily paint Syria as the battleground of a blossoming proxy war.
Russia won't like that idea, but it also won't like the paragraph in the bill about sanctions on anyone shipping arms or oil to the Syrian regime: Sanctions on arms and oil sales to Assad: Targeting any person or entity that the President of the United States determines has knowingly participated in or facilitated a transaction related to the sale or transfer of military equipment, arms, petroleum, or petroleum products to the Assad regime.
This very short article appeared on the businessinsider.com Internet site yesterday evening EDT...and it's Roy Stephens' final offering in today's column.
As Japan’s cherry trees bloomed and the stock market soared, Kohetsu Watanabe flew to a blossom-viewing party in Tokyo hosted by Prime Minister Shinzo Abe to tell the premier personally how bad things really are.
When the head of machine-parts maker Daikyo Seiki Co. shook hands with Abe at the 12,000-guest event in Shinjuku Gyoen park, he says he begged the premier to help small- and medium-sized companies that make up 70 percent of Japan’s industry.
“Stocks and the yen may have come back, but the state of the real economy is very different,” said Watanabe, 49, who has no plans to raise wages for his 17 employees and hasn’t paid a bonus since 2008. “It’s impossible for me to be optimistic.”
This Bloomberg story appeared on their website in the wee hours of yesterday morning MDT...and I found it in yesterday's edition of the King Report.
1. Dr. Stephen Leeb: "Gold, Silver and 100-Year Inflection Point to Crush the West". 2. Richard Russell: "I Haven't Seen This in 60 Years of Writing". 3. Ron Rosen: "Silver to Soar a Stunning 400% and Gold $1,500 in 10 Months". 4. The audio interview is with Egon von Greyerz.
Ten striking South African miners were taken to hospital on Tuesday after being hit by rubber bullets, police said, as labour strife swells in mines and factories ahead of mid-year pay negotiations.
"If our demands are not met we will have no option but to go to the streets," NUMSA national treasurer Mphumzi Maqungo told Reuters.
The comments underscored the fragility of labour relations in Africa's biggest economy since last year's bloody mining sector unrest, and pushed the rand beyond 9.50 to the dollar for the first time since early 2009.
The currency extended its two-week slide after police confirmed that security guards had fired rubber bullets at stone-throwing wildcat strikers at a chrome mine near the platinum belt town of Rustenburg, 120 km (70 miles) northwest of Johannesburg.
This Reuters story, filed from Capetown, was picked up by the mineweb.com Internet site yesterday...and I thank Ulrike Marx for digging it up for us.
India's Finance Minister P. Chidambaram is back to his favourite topic: curbing gold demand. India appears set to take even more steps to curb gold demand if imports continue to rise at the current pace, Chidambaram has said.
Speaking to the media on the sidelines of a conference, he pointed out, as consumers across the country thronged jewellery outlets this past month given the fall in the precious metal's price, that the government has decided not to distance itself from the financial problems caused by the ever rising demand by curbing gold imports yet again, despite the many measures already taken in the last few months.
Last week, India's central bank the RBI restricted, with immediate effect, the import of gold on consignment basis by banks. Even as the move will limit imports to a large extent, the government has said imports can be brought in only to meet the genuine needs of exporters of gold jewellery. However, retailers say the central bank's move is expected to lead to higher forex outgo on each transaction.
This mineweb.com story was filed from Mumbai yesterday...and is well worth reading. I thank Ulrike Marx for her third and final contribution to today's column.
Police began probing the Hong Kong Mercantile Exchange Ltd., owner of the failed commodities market set up by a member of the city’s cabinet, after the securities regulator found suspected financial irregularities.
The arrest of three men after the May 18 shuttering of the exchange prompted its Chairman Barry Cheung, who sits on Hong Kong’s Executive Council, to say he is taking a leave of absence from all public positions. Cheung hasn’t been accused of wrongdoing.
HKMEx lost its trading license after failing to attract sufficient volumes as it competed with rivals such as the Chicago Mercantile Exchange and the London Metals Exchange, which was bought by Hong Kong’s stock-exchange operator last year. Cheung, who ran the 2012 election campaign for the city’s Chief Executive Leung Chun-ying, is the latest in a series of prominent Hong Kong government and business figures to be affected by criminal investigations.
This businessweek.com story was posted on their website in the wee hours of this morning...and I thank U.A.E. reader Laurent-Patrick Gally for sending it along just before I hit the 'send' button on today's column.
In the short term, it is pretty much impossible to tell when prices have bottomed until after the fact. Instead of trying to guess the exact day or the specific price that gold and silver will turn back up, I take the long-term perspective that if gold surpasses $5,000 and silver exceeds $150 (which I consider to be questions of “when” not “if”) it won’t really matter whether someone now pays $1,700 or $1,350 for an ounce of gold or $22 or $35 for an ounce of silver. In other words, I consider today’s prices to be a bargain buying opportunity whether or not we are near the absolute market bottoms.
When markets get ready to turn, they often experience extreme volatility. Yesterday, for instance, the price of silver ranged all the way from $20.20 to $23.30, about at 15 percent swing. Almost no one was a buyer right at the moment that silver was at its daily low, as prices quickly soared. As I write this Tuesday morning, the silver price is about 10 percent above yesterday’s low.
So, did those who bought silver over the past several months when prices were higher than $20.20 overpay? Taking the long-term perspective, I don’t think so. Since most potential buyers didn’t jump in at yesterday’s low, does that mean that it is too late to get into silver? I emphatically say no!
This excellent must read commentary by Patrick Heller was posted on the numismaster.com Internet site yesterday...and the first reader through the door with the story yesterday was Elliot Simon.
I believe that the big buyer of the 10 million ounces of gold liquidated in the GLD was JPMorgan, either alone or with other collusive commercial banks. The same methodology I’ve previously attributed to a potential Mr. Big in SLV (also probably JPMorgan) is at work in GLD. If one (or 2 or 3) big buyers in GLD had merely purchased the 100 million shares that were sold in GLD, that would have quickly pushed the big buyer(s) over the 5% SEC reporting threshold thereby revealing their identity. But by having the gold redeemed out of the trust and the metal being purchased (instead of shares), stock reporting requirements are evaded. A single holder, perhaps working with a few collusive partners, have come to own what is, effectively, almost a quarter of the world’s largest gold stockpile and no one is the wiser.
This absolute must read is only part of what Ted had to say to his paying subscribers in his Weekend Review on Saturday. I thank Elliot Simon for today's last story.
Warren Buffett's Berkshire Hathaway Inc. had its credit rating cut one notch by Standard & Poor's, which cited a new methodology for evaluating insurers and Berkshire's dependence on its insurance business for dividend income.
The rating was cut to "AA" from "AA-plus," and S&P assigned a "negative" outlook, suggesting another cut could occur within a few years. S&P left its credit and financial strength ratings for Berkshire's insurance operating units at "AA-plus."
"The lower credit rating on Berkshire better reflects our view of Berkshire's dependence on its core insurance operations for most of its dividend income," S&P analyst John Iten wrote.
This moneynews.com story from last Friday was sent to me by West Virginia reader Elliot Simon on Saturday afternoon...and I thank him for today's first story.
America’s ticking debt bomb has been reset. Washington has suspended the debt ceiling, setting a date, and not a concrete dollar sum as a deadline, an unprecedented first in US history.
Citing ‘extraordinary measures’, the US Treasury has further delayed tackling America’s debt, and will wait until Labor Day, September 2nd, to revisit the burgeoning crisis. The ceiling has been lifted, and the Treasury has promised it will keep cash pumping into government spending programs beyond the debt limit through a series of emergency cash tools.
“It will not be until at least after Labor Day" when Washington will have reached their full borrowing capacity, Treasury Secretary Jacob Lew, told CNBC television on May 10th.
Elliot Simon also sent me this Russia Today story. It was posted on their website mid-morning Moscow time.
While we have wondered on numerous occasions previously if the collapse in lumber prices is the far more accurate indicator of end demand for housing (as confirmed by the recent collapse in multi-family housing starts), perhaps an even better indicator of trends in housing (and by implication the broader economy) is private sector intermediate end demand, such as Caterpillar North America sales, which unlike government data, are far less subject to political intervention, interpolation, guesswork, seasonal adjustments and otherwise, general manipulation.
And even though we have previously reported on the woes ailing the world's largest seller of bulldozers, excavators and wheel loaders, such focus was primarily targeted in the offshore markets, and especially China (the abysmal European market needs no mention). So maybe the time has come to shift attention to the US, where as Caterpillar just reported, not only are all foreign markets still trending at several impacted levels, but where US machine retail sales just saw the biggest tumble in three years, falling 18% Y/Y: the most since early 2010. What is more disturbing is that CAT equipment is used in far-broader economic activities than merely housing, and likely is a far more accurate indicator of true industrial end-demand than any other number cherry-picked by the government.
This short article was posted on the Zero Hedge website...and I thank 'David in California' for sending it our way.
“We don’t have to worry about a recession — we are in a depression,” says James Rickards.
“If you take the classic definition of a sustained, long-term downturn with economic growth below trend, then we are in the midst of a depression,” says the senior managing director of Tangent Capital and author of “Currency Wars.”
Rickards doesn’t see Fed Chairman Ben Bernanke as having the solution to the economic malaise gripping the county.
“Bernanke’s not a trader, so doesn’t think like a trader; he has no exit plan,” Rickards points out.
“There’s a good possibility I may never see another rate hike in my lifetime,” says Rickards.
This very short item was posted on the New York Post website late on Saturday night...and my thanks go out to Harold Jacobsen for bringing it to our attention.
Three months after hackers working for a cyber-unit of China’s People’s Liberation Army went silent amid evidence that they had stolen data from scores of American companies and government agencies, they appear to have resumed their attacks using different techniques, according to computer industry security experts and American officials.
It is not clear precisely who has been affected by the latest attacks. Mandiant, a private security company that helps companies and government agencies defend themselves from hackers, said the attacks had resumed but would not identify the targets, citing agreements with its clients. But it did say the victims were many of the same ones the unit had attacked before.
In interviews, Obama administration officials said they were not surprised by the resumption of the hacking activity. One senior official said Friday that “this is something we are going to have to come back at time and again with the Chinese leadership,” who, he said, “have to be convinced there is a real cost to this kind of activity.”
This article was posted in the Sunday edition of The New York Times...and it's Roy Stephens' first offering in today's column.
The once almighty U.S. dollar has lost its luster in some corners of the world.
But there's one outpost where greenbacks have never been stronger: in socialist, anti-imperialist Venezuela, whose government rails against American-style capitalism as the bane of humanity. The dollar is not just holding steady here -- it is flourishing like nowhere else, the byproduct of the fast-wilting economy President Hugo Chavez left behind when he died in March.
Black-market dealers operating on the thriving underground market sell greenbacks at more than four times the official, government-set rate of 6.3 bolivars to the dollar. And the price they're getting these days -- 28 per dollar -- is more than three times what it was just eight months ago.
This very interesting read was filed from Caracas...and showed up on The Washington Post website on Friday. I found it over at the gata.org Internet site on the weekend.
Rumors that Brazil's social security fund called Bolsa Familia was to be cancelled led thousands of people to rush to withdraw money from a Brazilian bank over the weekend.
Customers lined up at ATMs at dozens of bank branches of Caixa Economica Federal, a government-owned bank, which pays the social security subsidy on Saturday and Sunday.
"The bank branches themselves aren't open on Saturdays. What happened is that once the rumor gained momentum, people flocked down to their local branches to try to withdraw money from the ATMs," Rafael Carregal, a journalist at Brazil's main TV network Globo told CNBC.
Brazilian newspaper Estado de Sao Paulo reported that at five branches in the northeastern city of Sao Luiz and four others in the state of Maranhao, depositors broke into branches. Most of the branches that were affected were in the poorer northeast region of the country.
This short CNBC article was posted on their website early on Monday morning EDT...and I thank U.A.E. reader Laurent-Patrick Gally for sliding this into my in-box in the wee hours of this morning.
Monetarists across the world have warned that the International Monetary Fund and the Bank for International Settlements are making an historic error by calling for a withdrawal of emergency stimulus before the global economy has fully recovered.
The two watchdogs launched broadsides against central bank largess last week. The BIS -- the forum of central banks -- was particularly blunt, seeming to imply that quantitative easing "does not work".
Critics say this risks undermining the credibility of radical measures when more may yet be needed. They fear central banks could repeat the mistake made in 1937 when the Federal Reserve lost its nerve and tightened too soon, tipping America back into depression.
"The BIS and the IMF are deeply misguided and risk doing the world a grave disservice. The biggest threat right now is irrational fear of bubbles among central banks," said Lars Christensen, a monetary theorist at Danske Bank.
This longish piece by Ambrose Evans-Pritchard was posted on the telegraph.co.uk Internet site on Sunday afternoon BST...and it's Roy Stephens' second offering of the day.
Conservative activists have begun defecting to the UK Independence Party in protest at the Tory leadership’s “arrogant and insulting” attitude towards grassroots members.
Local Conservative party campaigners, including the chairman of one constituency association, will this week pledge their support for Nigel Farage after one of David Cameron’s allies described grassroots Tories as “mad, swivel-eyed loons”.
Mr Farage uses an advertisement in Monday's Telegraph to urge Conservative voters to back Ukip. The “loons” description, he says, is “the ultimate insult” from a party leadership that has betrayed the trust of its own supporters.
He writes in the advertisement: “Only an administration run by a bunch of college kids, none of whom have ever had a proper job in their lives, could so arrogantly write off their own supporters.”
This short article appeared on The Telegraph's website late on Sunday evening...and is also courtesy of Roy Stephens.
1. Dan Norcini: "Incredibly Important Developments in Gold and Silver Markets". 2. Egon von Greyerz [#1]: "The Big Upside Move in Gold and Silver is Now in Front of Us". 3. Hong Kong fund manager William Kaye: "Gold and Silver Smash and What Soros and Major Players are Doing". 4. Robert Fitzwilson: "Gold, Silver, Massive Leverage and Super Wealthy Panicking". 5. Andrew Maguire: "This Key Level to Trigger Huge Central Bank Buying". 6. Egon von Greyerz [#2]: "Clients Denied Gold at Major Banks as Shortage Intensifies". 7. The first audio interview is with Art Cashin...and the second audio interview is with Andrew Maguire.
Stocks are for lovers and gold is for haters. That's how one especially supercilious strategist (is there another kind?) sizes up the two markets, and it's clear he's been feeling the love lately. Stocks are at new highs in the U.S. and many other venues, while Japan's market is strapped to a rocket ship, all propelled by money fresh off the printing presses of the world's central banks.
Fans of the yellow metal, meanwhile, are feeling rather battered and bruised these days from the beating they've taken over the past month or so and, indeed, for more than a year and a half. Given all the quantitative easing -- which is how money printing is referred to in polite company these days, one would think gold would be getting a little love (or a facsimile of the same that cash can sometimes provide.)
I thank Ken Hurt for finding this Barron's article from Saturday for us...and I thank Chris Powell for providing the 'new and revised' headline. The actual headline reads "This Time Gold Bugs May Have a Point".
In his new commentary former Assistant U.S. Treasury Secretary Paul Craig Roberts squarely accuses the Federal Reserve of using the futures markets to suppress gold and silver prices to protect the U.S. dollar and the Fed's "quantative easing" policy.
"What," Roberts asks, "does this illegal manipulation of markets by the Federal Reserve tell us? It tells us that the Federal Reserve sees no way out of printing money in order to support the federal deficit and the insolvent banks. If the dollar came under attack and the Federal Reserve had to stop printing dollars, interest rates would rise. The bond and stock markets would collapse. The dollar would be abandoned as reserve currency. Washington would no longer be able to pay its bills and would lose its hegemony. The world of hubristic Washington would collapse."
Roberts' commentary is headlined "Washington Signals Dollar Deep Concerns" and it was posted on his Internet site on Saturday. I thank Chris Powell for the above introductory paragraph...and the headline...but the first reader through the door with this story was Rob Bentley.
The Hong Kong Mercantile Exchange will go ahead with a planned US$100 million rights issue and be ready within months to reapply for the trading licence it handed back to regulators at the weekend after it became clear the struggling commodity trader could no longer meet crucial financial criteria.
HKMEx chairman Barry Cheung Chun-yuen told the Sunday Morning Post that the decision to surrender the trading licence and not reopen for business tomorrow would have no impact on investors and that client contracts would be honoured.
"There is no question of not getting your money back or anything like that," Cheung said. "People absolutely do not have to worry about that and I don't think they are. The only thing they will want to know is what settlement price will be used."
This story, filed from Hong Kong, was picked up by the South China Morning Post on Sunday...and I found it in a GATA release.
India needs to bring down its gold demand from about 1,000 tonnes a year to 700 tonnes, which prevailed only a few years ago, a top policymaker has said.
This is necessary as increased gold imports are worsening the current account deficit, C. Rangarajan, chairman to the Prime Minister's Economic Advisory Council, said.
The demand for gold can be reduced by taming inflation and enhancing the real rate of return on financial products, Rangarajan said in his inaugural address at the 6th International Gold Summit, organised by Assocham here on Wednesday.
In the last two fiscal years -- 2011-12 and 2012-13 -- the country's gold imports in quantitative terms stood at 1,079 tonnes and 1,017 tonnes respectively.
This story was posted on thehindubusinessline.com Internet site last Wednesday...and I found it in a GATA release on Saturday. The actual headline reads "Need to Bring Down Gold Deman, Says Rangarajan".
The sudden vulnerability of bank deposits to confiscation for bank rescues is sending money out of banks and into equities, bonds, and gold, GoldMoney's Alasdair Macleod writes on Sunday. But for the time being, bullion banks are coping with increased demand for gold delivery by rationing metal to customers. Macleod's commentary is headlined "Bank Balances and Gold" and it's posted at the goldmoney.com Internet site.
I found this commentary in a GATA release on Sunday.
While we have become used to the almost daily trading-halts in Japanese government bonds, when the CME reports that Silver trading was halted four times overnight, it is increasingly clear that this market is anything but 'normal'.
This very short piece was posted on the Zero Hedge website yesterday morning...and I thank Elliot Simon for sending it along.
Gold prices continue to take a beating with futures at $1,354 an ounce.
Marc Faber, publisher of The Gloom, Boom and Doom Report, told Talking Numbers that he is buying physical gold and will buy more if it hits the $1,300 mark.
But, he said that he isn't keeping it in the U.S. "I bought gold at $1,400, I buy every month some gold, and I have an order to buy more at $1,300 because I want to keep an allocation towards gold – physical gold – and not stored in the United States at all times."
This short commentary also has the entire CNBC video interview embedded as well...and it was posted on the businessinsider.com Internet site yesterday morning EDT.
Changi Airport, Southeast Asia’s largest freight airfield, plans to attract more gold bars, tuna and vaccines to Singapore as it seeks to increase handling of high-value cargo to make up for slowing trade.
“An underlying demand for these things is growing with the rise of the Asian middle class,” Fong said in a May 15 interview. “People want higher-value, higher-quality food. Demand in North Asia is growing fast.”
The airport is offering 50 percent rebates on landing fees since the start of the year to help cargo airlines struggling with lower demand amid sluggish economies in the U.S. and Europe. Changi is enticing carriers of high-yield cargo with a tax-free maximum-security vault to store valuable art, gold and gems, as well as Southeast Asia’s biggest refrigerated facilities for perishable goods.
This story, filed from Singapore, was posted on the Bloomberg Internet site early yesterday morning Mountain Daylight Time.
The prospect of fresh strikes in South Africa's already embattled mining sector resurfaced on Sunday after representatives of the National Union of Mineworkers (NUM) said it would seek pay rises of up to 60% from gold and coal producers.
This comes as mining companies battle higher costs and falling prices in an already heated labour climate, and as the country is hoping to avoid the 2012 wildcat strike action at platinum and gold mines that claimed the lives of 50 people and cost the industry and economy billions in lost revenue and production.
Mineworkers are mobilising to assert themselves, with the NUM fighting a challenge to its once near monopoly in the shafts from the Association of Mineworkers and Construction Union (Amcu), which has poached tens of thousands of platinum miners from it in a violent struggle for members.
NUM said it was seeking an entry-level minimum monthly wage of R7 000 for gold and coal surface workers and R8 000 for those underground in a submission to the Chamber of Mines.
This Reuters piece was picked up by the fin24.com Internet site on Sunday evening...and I thank Matthew Nel for digging it up for us.
Platinum is a precious metal, as is palladium, though to a lesser degree. However, like silver, both are also industrial metals. Unlike silver, it's their industrial use that is the primary price driver for both platinum and palladium – and that use is undergoing a fundamental shift.
The largest source of demand for platinum and palladium is the automotive industry, for use in auto catalysts. In turn, the fortunes of the auto industry are sensitive to the health of the world's major economies. We've been bearish on platinum-group metals for years, primarily because we weren't convinced a healthy – much less roaring – world economy could be sustained when so many governments continue spending beyond their means.
We reconsidered the market last year, when strikes in South Africa – home to 75% of global platinum production and 95% of known reserves – threatened supplies. But as we wrote last December, the strikes ended without great impact on long-term supply.
Since then, however, the fundamentals of this market have changed. Others may disagree with our economic outlook, which is still bearish, but it's due to supply issues – not demand – that our interest is now drawn to these metals, and particularly to palladium.
This commentary by Jeff Clark was contained in yesterday's edition of the Casey Daily Dispatch...and it's definitely worth reading.
Daily Bell: Why did the price of gold plummet?
Doug Casey: Once again, I see it as just the normal, albeit large, fluctuation. It's not like you shouldn't expect a market that's risen steeply for a dozen consecutive years to come off at some point. Especially since not only does everything look rosy in the stock and bond markets, but even real estate spears to be recovering. A lot of conventional – and foolish, in my view – people think that printing trillions of new currency units has solved the crisis, and obviated the need for owning gold. So there's selling. Perhaps a big trader sold a bunch of contracts to set off a lot of stop losses and panic the market. If so, it was a smart trade, and it worked.
Now, I know that that's not a very sexy explanation. But I'm a believer in Occam's Razor, which hold that the simplest explanation of something is usually the correct one. However, I'm afraid it leads me to a pet subject of mine, one that will both take a while to explain, and will, regrettably, antagonize some of your readers. Many gold bugs (but not all, because I too am a gold bug) seem to think that a coterie of malefactors of great wealth sit around a huge boardroom table, perhaps chaired by Dr. Evil cradling his white cat, and send forth their minions, "Da Boyz," to "smack down" the depressed and struggling gold and silver markets. A large number of gold bugs are also conspiracy bugs. They have all of these standard catchphrases for describing what's happening. I've read their stuff for years and, frankly, it impresses me as little more than accusations, name-calling and conjecture.
"...I don't want the GATA guys and their supporters to take this personally. I simply think they're wrong..."
Doug explains why he feels that the gold market is free and fair...and why all us price management believers are out to lunch. Doug holds nothing back...and whether you believe him or not...it's worth reading. I thank Doug for sending it to me.
Interviewed yesterday by The Daily Bell, Casey Research Chairman Doug Casey once again dismissed complaints of gold market manipulation.
"I don't doubt that the powers-that-be would prefer to have the price of gold lower," Casey says, "just like they would prefer to have the price of wheat and copper and lumber and everything else lower. But there's no evidence that I've ever been shown other than, frankly, just assertions."
This is distressing but maybe, to get Clintonistic, it depends on the meaning of "shown." Though GATA has sent to Casey -- and once even handed to him face to face -- all sorts of documentation of gold market manipulation, if he has not looked at it, has he ever been "shown"? But then the question becomes whether he wants to look at it, though one might hope that anyone might want to look at the evidence before commenting on an issue.
In his interview with The Daily Bell, Casey acknowledges the likely motive of central banks in wanting gold and commodity prices lower. But he refuses to acknowledge their opportunity along with the evidence lest faith in markets be shaken.
GATA believes in markets as much as anyone could. Indeed, gold price suppression is a catastrophe for the world precisely because it is the prerequisite for the destruction of all markets, the mechanism by which a few unelected grandees strive to control the price of all capital, labor, goods, and services in the world, resulting in their worldwide misallocation.
This commentary [with multiple links] by GATA's secretary treasurer Chris Powell, was posted on the gata.org Internet site yesterday evening and...along with Doug's interview at The Daily Bell...it, too, is worth reading.
The last time that Doug got up and spoke against the price management scheme by JPMorgan and a small handful of bullion banks, was back in April of 2012. GATA's Chris Powell had a lengthy response then as well...but has updated in his comments above, so it would serve no purposed to link that older article.
But James Turk had something to say about Doug's comments back then...and Mr. Turk's commentary, although rather long, are still as relevant today as they were back then...so I've decided to include it in today's column.
As I said, it's a long read, so top up your coffee before you get started.
Here's another item I've posted before. This is an audio interview with silver analyst Ted Butler by Jim Puplava over at financialsense.com that was recorded on March 17, 2012. In it, Ted describes in minute detail how the silver [and gold] price management scheme is orchestrated on the Comex/Globex futures market.
It explains exactly how every waterfall decline in silver [and gold] happens...and the sequence of events that precede it...and follow it. It's been the same pattern for over twenty years. Ted has been following the goings-on in silver on the Comex futures market for about 30 years...and is a world authority on it.
So if you want to know what happened on April 12/15th...and yesterday in the thinly-traded Far East market...Ted has the answers.
Because of his work, the Commitment of Traders Report is now widely followed just about everywhere, even if some of the commentators using it don't interpret the data correctly. The other report that Ted uncovered was the Bank Participation Report...and as Ted put it in a commentary for paying subscribers within the last week...if JPMorgan could kill these two reports, they would...as it exposes their movements [and others] to the naked light of day.
If you've listened to this before, it's time for a refresher...and if you haven't, it's a must listen.
You know that gold bear market that the financial press keeps touting? The one George Soros keeps proclaiming? Well, it is not there. The gold bear market is disinformation that is helping elites acquire the gold.
Certainly, Soros himself doesn’t believe it, as the 13-F release issued by the Securities and Exchange Commission on May 15 proves. George Soros has significantly increased his gold holding by purchasing $25.2 million of call options on the GDXJ Junior Gold Miners Index.
In addition the Soros Fund maintains a $32 million stake in individual mines; added 1.1 million shares of GDX (a gold miners ETF) to its holdings which now stand at 2,666,000 shares valued at $70,400,000; has 1,100,000 shares in GDXJ valued at $11,506,000; and 530,000 shares in the GLD gold fund valued at $69,467,000. [values as of May 17]
The 13-F release shows the Soros Fund with $239,200,000 in gold investments. If this is bearish sentiment, what would it take to be bullish?
This commentary by Paul was posted on this website yesterday...and I thank reader Ken Hurt for bringing this to our attention.
The past week or three have been, to say the least, disappointing for precious metals investors. Gold and silver have continued to step downwards towards new interim lows as money continues to move from bullion (or at least from paper variations of it) to the general stock markets which have been continuing to perform well. All this despite, so we hear, continuing high demand for physical gold and silver from Asian markets in particular. But this physical metal demand growth seems to be being more than countered by some strange precious metals sales patterns – the latest of which saw silver plunge 10% in 4 minutes on a big computer sell order – from a single client according to a major Japanese bank – at a light trading time.
If anything out there demonstrates how the dice are loaded against the individual investor in today’s markets, then the recent goings on in gold and silver prices surely do. This is not a natural market. Sure, prices can move up and down and people can get their fingers burnt but when we come across sales of the kind of magnitude seen recently they have to be a hugely concerted attempt to move the market to the perpetrator’s advantage.
This article by mineweb.com's Lawrie Williams was posted on their website early this morning in London...and it's definitely worth reading.